10 U.S.C. § 1370 : US Code - Section 1370: Commissioned officers: general rule; exceptions

      (a) Rule for Retirement in Highest Grade Held Satisfactorily. -
    (1) Unless entitled to a higher retired grade under some other
    provision of law, a commissioned officer (other than a commissioned
    warrant officer) of the Army, Navy, Air Force, or Marine Corps who
    retires under any provision of law other than chapter 61 or chapter
    1223 of this title shall, except as provided in paragraph (2), be
    retired in the highest grade in which he served on active duty
    satisfactorily, as determined by the Secretary of the military
    department concerned, for not less than six months.
      (2)(A) In order to be eligible for voluntary retirement under any
    provision of this title in a grade above major or lieutenant
    commander, a commissioned officer of the Army, Navy, Air Force, or
    Marine Corps must have served on active duty in that grade for not
    less than three years, except that the Secretary of Defense may
    authorize the Secretary of a military department to reduce such
    period to a period not less than two years.
      (B) In the case of an officer to be retired in a general or flag
    officer grade, authority provided by the Secretary of Defense to
    the Secretary of a military department under subparagraph (A) may
    be exercised with respect to that officer only if approved by the
    Secretary of Defense or another civilian official in the Office of
    the Secretary of Defense appointed by the President, by and with
    the advice and consent of the Senate.
      (C) Authority provided by the Secretary of Defense to the
    Secretary of a military department under subparagraph (A) may be
    delegated within that military department only to a civilian
    official of that military department appointed by the President, by
    and with the advice and consent of the Senate.
      (D) The President may waive subparagraph (A) in individual cases
    involving extreme hardship or exceptional or unusual circumstances.
    The authority of the President under the preceding sentence may not
    be delegated.
      (E) In the case of a grade below the grade of lieutenant general
    or vice admiral, the number of members of one of the armed forces
    in that grade for whom a reduction is made during any fiscal year
    in the period of service-in-grade otherwise required under this
    paragraph may not exceed the number equal to two percent of the
    authorized active-duty strength for that fiscal year for officers
    of that armed force in that grade.
      (F) Notwithstanding subparagraph (E), during the period ending on
    December 31, 2007, the number of lieutenant colonels and colonels
    of the Air Force, and the number of commanders and captains of the
    Navy, for whom a reduction is made under this section during any
    fiscal year in the period of service-in-grade otherwise required
    under this paragraph may not exceed four percent of the authorized
    active-duty strength for that fiscal year for officers of that
    armed force in that grade.
      (3) A reserve or temporary officer who is notified that he will
    be released from active duty without his consent and thereafter
    requests retirement under section 3911, 6323, or 8911 of this title
    and is retired pursuant to that request is considered for purposes
    of this section, to have been retired involuntarily. An officer
    retired pursuant to section 1186(b)(1) of this title is considered
    for purposes of this section to have been retired voluntarily.
      (b) Retirement in Next Lower Grade. - An officer whose length of
    service in the highest grade he held while on active duty does not
    meet the service in grade requirements specified in subsection (a)
    shall be retired in the next lower grade in which he served on
    active duty satisfactorily, as determined by the Secretary of the
    military department concerned, for not less than six months.
      (c) Officers in O-9 and O-10 Grades. - (1) An officer who is
    serving in or has served in the grade of general or admiral or
    lieutenant general or vice admiral may be retired in that grade
    under subsection (a) only after the Secretary of Defense certifies
    in writing to the President and Congress that the officer served on
    active duty satisfactorily in that grade.
      (2) In the case of an officer covered by paragraph (1), the three-
    year service-in-grade requirement in paragraph (2)(A) of
    subsection (a) may not be reduced or waived under that subsection -
    
        (A) while the officer is under investigation for alleged
      misconduct; or
        (B) while there is pending the disposition of an adverse
      personnel action against the officer for alleged misconduct.

      (3)(A) The Secretary of Defense may delegate authority to make a
    certification with respect to an officer under paragraph (1) only
    to the Under Secretary of Defense for Personnel and Readiness or
    the Deputy Under Secretary of Defense for Personnel and Readiness.
      (B) If authority is delegated under subparagraph (A) and, in the
    course of consideration of an officer for a certification under
    paragraph (1), the Under Secretary or (if such authority is
    delegated to both the Under and Deputy Under Secretary) the Deputy
    Under Secretary makes a determination described in subparagraph (C)
    with respect to that officer, the Under Secretary or Deputy Under
    Secretary, as the case may be, may not exercise the delegated
    authority in that case, but shall refer the matter to the Secretary
    of Defense, who shall personally determine whether to issue a
    certification under paragraph (1) with respect to that officer.
      (C) A determination referred to in subparagraph (B) is a
    determination that there is potentially adverse information
    concerning an officer and that such information has not previously
    been submitted to the Senate in connection with the consideration
    by the Senate of a nomination of that officer for an appointment
    for which the advice and consent of the Senate is required.
      (d) Reserve Officers. - (1) Unless entitled to a higher grade, or
    to credit for satisfactory service in a higher grade, under some
    other provision of law, a person who is entitled to retired pay
    under chapter 1223 of this title shall, upon application under
    section 12731 of this title, be credited with satisfactory service
    in the highest grade in which that person served satisfactorily at
    any time in the armed forces, as determined by the Secretary
    concerned in accordance with this subsection.
      (2) In order to be credited with satisfactory service in an
    officer grade (other than a warrant officer grade) below the grade
    of lieutenant colonel or commander, a person covered by paragraph
    (1) must have served satisfactorily in that grade (as determined by
    the Secretary of the military department concerned) as a reserve
    commissioned officer in an active status, or in a retired status on
    active duty, for not less than six months.
      (3)(A) In order to be credited with satisfactory service in an
    officer grade above major or lieutenant commander, a person covered
    by paragraph (1) must have served satisfactorily in that grade (as
    determined by the Secretary of the military department concerned)
    as a reserve commissioned officer in an active status, or in a
    retired status on active duty, for not less than three years.
      (B) A person covered by subparagraph (A) who has completed at
    least six months of satisfactory service in grade may be credited
    with satisfactory service in the grade in which serving at the time
    of transfer or discharge, notwithstanding failure of the person to
    complete three years of service in that grade, if that person is
    transferred from an active status or discharged as a reserve
    commissioned officer - 
        (i) solely due to the requirements of a nondiscretionary
      provision of law requiring that transfer or discharge due to the
      person's age or years of service; or
        (ii) because the person no longer meets the qualifications for
      membership in the Ready Reserve solely because of a physical
      disability, as determined, at a minimum, by a medical evaluation
      board and at the time of such transfer or discharge such person
      (pursuant to section 12731b of this title or otherwise) meets the
      service requirements established by section 12731(a) of this
      title for eligibility for retired pay under chapter 1223 of this
      title, unless the disability is described in section 12731b of
      this title.

      (C) If a person covered by subparagraph (A) has completed at
    least six months of satisfactory service in grade, the person was
    serving in that grade while serving in a position of adjutant
    general required under section 314 of title 32 or while serving in
    a position of assistant adjutant general subordinate to such a
    position of adjutant general, and the person has failed to complete
    three years of service in that grade solely because the person's
    appointment to such position has been terminated or vacated as
    described in section 324(b) of such title, then such person may be
    credited with satisfactory service in that grade, notwithstanding
    the failure to complete three years of service in that grade.
      (D) To the extent authorized by the Secretary of the military
    department concerned, a person who, after having been recommended
    for promotion in a report of a promotion board but before being
    promoted to the recommended grade, served in a position for which
    that grade is the minimum authorized grade may be credited for
    purposes of subparagraph (A) as having served in that grade for the
    period for which the person served in that position while in the
    next lower grade. The period credited may not include any period
    before the date on which the Senate provides advice and consent for
    the appointment of that person in the recommended grade.
      (E) To the extent authorized by the Secretary of the military
    department concerned, a person who, after having been found
    qualified for Federal recognition in a higher grade by a board
    under section 307 of title 32, serves in a position for which that
    grade is the minimum authorized grade and is appointed as a reserve
    officer in that grade may be credited for the purposes of
    subparagraph (A) as having served in that grade. The period of the
    service for which credit is afforded under the preceding sentence
    may only be the period for which the person served in the position
    after the Senate provides advice and consent for the appointment.
      (F) A person covered by subparagraph (A) who has completed at
    least six months of satisfactory service in a grade above colonel
    or (in the case of the Navy) captain and, while serving in an
    active status in such grade, is involuntarily transferred (other
    than for cause) from active status may be credited with
    satisfactory service in the grade in which serving at the time of
    such transfer, notwithstanding failure of the person to complete
    three years of service in that grade.
      (4) A person whose length of service in the highest grade held
    does not meet the service in grade requirements specified in this
    subsection shall be credited with satisfactory service in the next
    lower grade in which that person served satisfactorily (as
    determined by the Secretary of the military department concerned)
    for not less than six months.
      (5)(A) The Secretary of Defense may authorize the Secretary of a
    military department to reduce the 3-year period required by
    paragraph (3)(A) to a period not less than two years.
      (B) In the case of a person who, upon transfer to the Retired
    Reserve or discharge, is to be credited with satisfactory service
    in a general or flag officer grade under paragraph (1), authority
    provided by the Secretary of Defense to the Secretary of a military
    department under subparagraph (A) may be exercised with respect to
    that person only if approved by the Secretary of Defense or another
    civilian official in the Office of the Secretary of Defense
    appointed by the President, by and with the advice and consent of
    the Senate.
      (C) Authority provided by the Secretary of Defense to the
    Secretary of a military department under subparagraph (A) may be
    delegated within that military department only to a civilian
    official of that military department appointed by the President, by
    and with the advice and consent of the Senate.
      (6) The number of reserve commissioned officers of an armed force
    in the same grade for whom a reduction is made during any fiscal
    year in the period of service-in-grade otherwise required under
    paragraph (5) may not exceed the number equal to 2 percent of the
    strength authorized for that fiscal year for reserve commissioned
    officers of that armed force in an active status in that grade.
      (e) Advance Notice to Congressional Committees. - (1) In the case
    of an officer to be retired in a grade that is a general or flag
    officer grade who is eligible to retire in that grade only by
    reason of an exercise of authority under paragraph (2) of
    subsection (a) to reduce the three-year service-in-grade
    requirement otherwise applicable under that paragraph, the
    Secretary of Defense, before the officer is retired in that grade,
    shall notify the Committee on Armed Services of the Senate and the
    Committee on Armed Services of the House of Representatives of the
    exercise of authority under that paragraph with respect to that
    officer.
      (2) In the case of a person to be credited under subsection (d)
    with satisfactory service in a grade that is a general or flag
    officer grade who is eligible to be credited with such service in
    that grade only by reason of an exercise of authority under
    paragraph (5) of that subsection to reduce the three-year service-
    in-grade requirement otherwise applicable under paragraph (3)(A)
    of that subsection, the Secretary of Defense, before the person is
    credited with such satisfactory service in that grade, shall notify
    the Committee on Armed Services of the Senate and the Committee on
    Armed Services of the House of Representatives of the exercise of
    authority under paragraph (5) of that subsection with respect to
    that officer.
      (3) In the case of an officer to whom subsection (c) applies, the
    requirement for notification under paragraph (1) is satisfied if
    the notification is included in the certification submitted with
    respect to that officer under paragraph (1) of such subsection.